Pradhan Mantri Awas Yojana

Pradhan Mantri Awas Yojana is a financial aid for home loan borrowers, initiated by the central government to provide pucca house for beneficiaries under EWS (Economically Weaker Section), LIG (Lower Income Group) and MIG (Middle Income Group) categories in urban and rural areas of the country with the help of State/UT governments.

The mission is divided into two parts, PMAY – Urban for Urban cities and PMAY – Gramin for rural cities in India. The government is aiming to build 2.95 crore houses over the 7 years period starting from July 2015. Under this mission, government is offering subsidised interest rate ranging from 3% to 6.5% to the eligible beneficiaries to build or construct a new house.

PMAY – Urban

Under PMAY Urban, the government with the help of competent local housing authorities registered with central/state government in urban cities to provide financial help to any eligible local residents who is looking to purchase/construct his/her first pucca house with the help of a housing loan and earning an annual income of under a certain threshold. The government has targeted to construct upto 35% houses in the locality under this scheme, effective from 2015 to 2022.

Under the scheme, the government is aiming to build houses ranging between carpet area of 30 square meters to 150 square meters. However, States are flexible to determine the area of EWS house as per the local needs with information to the Central Ministry running the scheme.

The programme is designed to solve the housing needs of a local resident living in an urban city, and specifically targeting the following goals –

Slum rehabilitation of Slum Dwellers with participation of private developers using land as a resource.

To promote affordable housing for people who comes under weaker income section through credit linked subsidy.

To provide affordable housing in partnership with Public & Private sectors’ local authorities.

To provide subsidy to eligible individuals for construction of the house.

A Beneficiary will be eligible for availing only a single benefit under any of the existing options that is slum redevelopment with private partner, credit linked subsidy, direct subsidies to individual beneficiary and affordable housing in partnership.

Feature of PMAY – Urban

Subsidized Interest Rate

Under Pradhan Mantri Awas Yojana Housing for All mission, the central government of India is offering a subsidized interest rate of 6.5% on home loans to the eligible beneficiaries under EWS, LIG or MIG categories, where the home loan tenure is equal to 15 years.

Preference to Senior Citizens/Differently Abled

Under PMAY Housing for All mission, the preference is being offered to senior citizens (above 60 years) and the beneficiaries who are being considered under Differently Abled category for house on the ground floor under the housing projects being built.

Eligibility Criteria for PMAY Urban

An eligible family under this scheme will consist of husband, wife and unmarried children, where the family must not own a pucca house (an all weather dwelling unit) in the name of any member of the family at any location in India.

The family must be eligible under EWS criteria where the total annual income of the family is not above Rs. 3 Lacs. However, an eligible family can receive some flexibility on the income criteria from State/UT government depending upon the income in the locality as consulted with the Centre.

Families eligible under LIG criteria should have an annual income ranging between Rs. 3 Lacs to Rs. 6 Lacs.

Families eligible under MIG criteria should have an annual income ranging between Rs. 6 Lacs to Rs. 18 Lacs.

The beneficiary can only buy a new house using the benefits provider under the scheme. These benefits can not be availed on already built home.

Interest Rates for PMAY Urban

Beneficiary Category

Interest Subsidy

Carpet Area

Income

EWS

6.5%

30 square meters

Upto Rs. 3 Lacs

LIG

6.5%

60 square meters

Rs. 3 Lacs to Rs. 6 Lacs

MIG-I

4%

110 square meters

Rs. 6 Lacs to Rs. 12 Lacs

MIG-II

3%

150 square meters

Rs. 12 Lacs to Rs. 18 Lacs

PMAY – Urban Schemes

Credit Linked Subsidy Scheme (CLSS)

Under this scheme, the government is offering home loan subsidy of up to Rs 2.67 Lacs on housing loans by applying for Credit Linked Subsidy Scheme (CLSS) under Pradhan Mantri Awas Yojana in urban areas only, if you’re an eligible beneficiary belonging to the EWS/LIG & MIG segment.

For Economically Weaker Section(EWS)/Lower Income Group(LIG), the interest subsidy will be provided on housing loans for acquisition, construction of house. The Credit Linked subsidy would also be available for housing loans availed for new construction and addition of rooms, kitchen, toilet etc. to existing dwellings as incremental housing.

The offered house is defined as pucca house capable of handling all weather conditions, either a single unit or a unit in multi-storeyed super structure such as multi-storeyed societies. The house for EWS Category will have a carpet area of upto 30 square meters and 60 square meters for LIG Category with basic civic facilities and infrastructure such as toilets, water, and electricity etc. The carpet area is defined as the area enclosed within the walls, actual area to lay the carpet. This area does not include the thickness of the inner walls.

Key Parameters for Credit Linked Subsidy Scheme

Criteria

EWS / LIG

MIG-I

MIG-II

Maximum Household Income (p.a.)

Up to Rs. 6 Lacs

Rs. 6 – Rs. 12 Lacs

Rs. 12 – Rs. 18 Lacs

Maximum Property Area (carpet area)

30 sq.m & 60 sq.m

110 sq.m

150 sq.m

Maximum Loan Amount

Rs. 6 Lacs

Rs. 9 Lacs

Rs. 12 Lacs

Maximum Tenure

15 years

15 years

15 years

Interest Subsidy (% p.a.)

6.50%

4%

3%

Subsidy Amount

Rs. 2.67 Lacs

Rs. 2.35 Lacs

Rs. 2.30 Lacs

Women Ownership on Property

Yes

Not Applicable

Not Applicable

Beneficiary Family must not own a pucca house in India

Applicable

Applicable

Applicable

How to Apply for Credit Linked Subsidy Scheme (CLSS)

Apply for a home loan from a primary lending institution seeking subsidy.

If eligible for subsidy, your application will be forwarded to the Central Nodal Agency (CNA).

If it’s approved, the CNA will disburse the subsidy amount to the lender.

This will be credited to your account, thus reducing the total loan amount.

For instance, if your annual income is Rs 7 lakh and the loan amount is Rs 9 lakh, the subsidy will be Rs 2.35 lakh.

When this is deducted, the loan is reduced to Rs 6.65 lakh. You will pay EMI on this lowered amount.

If the loan amount is higher than the maximum amount eligible for subsidy, the excess will attract interest at the prevalent rate.

Affordable Housing in Partnership (AHP)

Under this scheme, the central government is offering financial assistance of Rs. 1.5 Lacs for each EWS house being built under Pradhan Mantri Awas Yojana with different partnerships by States/UTs/Cities either through their agencies or in partnership with the private sector including industries.

The States/UTs would be the one who will decide the upper ceiling on the sale price of an EWS house in rupees per square meter of carpet area in such projects with an objective to make them affordable and accessible to the intended beneficiaries, where the sale price would be fixed based on the project or the city. To make it more reliable, States and cities may extend other concessions applied by them such as their State subsidy, land at affordable cost, stamp duty exemption etc.

Under affordable housing, a single project will have minimum 250 houses and can consist mix of houses for different categories where 35% houses in the project must be for EWS category.

Beneficiary-led Individual House Construction / Enhancement

Under this scheme, the central government is offering assistance to individual families eligible under EWS categories to either construct new houses or enhance existing houses on their own to cover beneficiaries who are not eligible under any other schemes under Pradhan Mantri Awas Yojana. The beneficiary families can get a subsidy of Rs. 1.5 Lacs for construction of new houses under the mission. If the eligible beneficiary in residing in slums which are not being redeveloped can be covered under this component where the beneficiary must have a Kutcha house.

The beneficiary need to approach ULB (Urban Local Bodies) for the subsidy. State/UT or cities may also contribute financially for such individual house construction. Central assistance will be released to the bank accounts of beneficiaries identified in projects through States/UTs as per recommendations of State/UT. Though the funds from Central Government to State Governments would be released in lump-sum including assistance for this component, State Government should release financial assistance to the beneficiaries in 3-4 instalments depending on progress of construction of the house.

Beneficiary may start the construction using his own funds or any other fund and GoI assistance will be released in proportion to the construction by individual beneficiary. The last instalment of Rs. 30,000 of GoI assistance should be released only after completion of the house.

PMAY – Gramin (Rural)

Under Pradhan Mantri Awas Yojana – Gramin, the Indian government is obligated to build 1 crore houses in rural areas of the country, with the help of competent local housing authorities registered with central/state government in rural cities to fulfill the necessity of home to the local residents. The total cost of the houses being built under this programme is above Rs. 1.3 crores for the session 2018-2019 let alone. The programme is said to be target the availability of 60% of the total funds to SC/ST and 15% of the total funds to Minorities.

Feature of PMAY – Gramin

Construction of 1 Crore Houses

The government is aiming to build 1 crore pucca houses in rural area over a period of 3 years, session of 2016 to 2017, 2017 to 2018 and 2018 to 2019.

Enhanced House Size

Under this scheme, the size of the house is enhanced to 25 square meters including cooking area from 20 square meter in previous gramin housing schemes.

Increased Subsidised Amount

The government is now offering subsidised amount of Rs. 1.2 Lacs in plains as opposed to Rs. 70,000 and Rs. 1.30 Lacs in hilly states, difficult areas and IAP districts as opposed to Rs. 75,000 being offered under previous gramin (rural) housing schemes.

Loan Facility from Banks

Under the scheme, the government also provide the facility to avail loan of upto Rs. 70,000 from banks to build their dream house as per their requirements.

Eligibility Criteria for PMAY Gramin

An eligible beneficiary under PMAY – Gramin include all the homeless and family living in kutcha house with zero, one or two rooms.

The priority will be assigned to beneficiary families based on the houselessness followed by the number of rooms in the kutcha house, zero, one and two.

Beneficiary families should not have any adult member between the age of 16 to 59 years.

Beneficiary families headed by female should not have any adult male member between the age of 16 to 59 years.

Beneficiary families should not have any literate adult member of above 25 years age.

Beneficiary families who have any differently abled member or no able bodied adult member are also eligible.

Beneficiary family can be one landless, deriving the major part of their income from manual casual labour.

The house must be built by the beneficiary himself/herself or under his/her supervision, without engaging any contractor. In case the beneficiary is old or differently abled person, then the construction of the house will be taken up as a part of mason training program.

The construction of the house should be completed within 12 months from the date of sanction of the funds.

Finance

The government is offering Rs. 1.20 Lacs in plain areas and Rs. 1.30 Lacs in hilly states, difficult areas and IAP districts. Where a difficult area is defined as an area where the construction cost is higher due to poor availability of materials, poor connectivity, adverse geo-morphological and climatic conditions. Hilly states includes the states of J&K, Himachal Pradesh and Uttarakhand, whereas IAP districts are defined as the districts taken under integrated action plan of ministry of home affairs. The funds will be disbursed within 3 instalments.

Houses sanctioned under PMAY – Gramin will also be provided Rs. 12,000 additional aid for the construction of toilets from Swachh Bharat Mission or any other dedicated financing source.